I am willing to live frugally now so that my money can become an additional income earner. I think this one reason is the single most important way that your frugality can really pay off in a tangible and very major way.
If I spend every dime I make, the only money coming into my household is the money that comes via my paycheck. If, instead, I can resist spending $50 or $100 or whatever amount of money per month and put that money in a Roth IRA or in mutual funds, that money now becomes an additional income earner. (As my dad likes to joke, "I say to my money 'Get off the couch and go get a job!'"). That money can earn interest, day in and day out, while you exert no additional effort. Who doesn't like the idea of your money working for you?
And, of course, the earlier you can get your finances under control enough to have money to invest, the longer that money will work for you. Who wouldn't rather have your dollars working hard for 10 years instead of 5 or 30 years instead of 20?
I'm willing to guess most of us hate interest when it's us paying it (22% for a burger you paid for on your credit card, anyone?), but when interest is working in my favor, well, I love the fact that it doesn't take weekends or holidays off and that it never gets sick or needs a personal day.
If you can discipline yourself enough to live frugally today, you can reap the rewards of it for the rest of your life and in a really substantial way (we're talking hundreds of thousands, if not millions of dollars, that you did not have to earn yourself because your money, which you already earned, is now working for you).
It's worth asking yourself how much suffering $25 or $50 or $100 out of your monthly budget would cause you. Would it be worth it?
5 comments:
We have had fun saving receipts of cvs or stop and shop and noting the bottom "you saved" amount and putting that amount into our actual savings account.
Janssen - this 3 part series was just great. I agree with everything you said 100% (although I fear that my penny-pinching abilities could use a bit of improvement).
Rachel, this is a BRILLIANT idea! I believe it wins our "Idea of the Week" award!!
I will be starting this new savings plan immediately.
Amen. We started a mutual fund last year (when we had two incomes) before that money got frivoled away on a baby or bills. SO GLAD.
To start out this blog is so great!!! Slowly but surely i think i am becoming more frugal!!! But i still have a lot to learn... like my question for this post is how do you go about starting a Roth IRA or mutual funds?
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